Digital Federal Credit Union, which is based at 220 Donald J. Lynch Blvd. in Marlborough, has reached an agreement for the development of a new office building on the same street.
In a boost for the struggling MetroWest economy, local developer William A. DePietri has struck an agreement to construct a 125,000-square-foot office building in Marlborough on behalf of Digital Federal Credit Union, industry sources told Banker & Tradesman last week. The structure will be built on Donald J. Lynch Boulevard, just a few doors down from DFCU’s headquarters at 220 Donald J. Lynch Blvd.
“It is a done deal,” proclaimed one source familiar with the negotiations for the build-to-suit structure. Ironically, DePietri was part of the group that redeveloped the former Digital Equipment Corp. headquarters in nearby Maynard into a multi-tenanted office complex during the late 1990s. With DEC having been sold several years ago to Compaq Computer and subsequently dismantled, DFCU is one of the last remnants of its erstwhile namesake in the MetroWest area.
DePietri did not return a call to his Southborough headquarters by press deadline, while Timothy Garner, the appointed spokesman for DFCU, was unavailable for comment on Friday. No one else was authorized to discuss the matter, said another member of the credit union’s marketing department. Despite that, sources insisted that the two sides have come to terms. It is unclear whether any zoning approvals will first be required for the project, but one source said the developer hopes to commence with construction over the near term.
DePietri did earlier this year organize a limited liability corporation known as DLB LLC. That entity subsequently purchased property at 853 Donald J. Lynch Blvd. The $1 million deal was financed with a $3 million loan from DFCU, according to records on file at the Middlesex Southern District Registry of Deeds. In late May, DLB LLC received a $9.8 million loan on the property from Framingham Cooperative Bank.
Metro Moves
Some real estate professionals expressed surprise the DFCU did not fill its space need at one of the many existing real estate opportunities in the MetroWest, which has seen its office market collapse in the wake of the sudden high-tech bust in 2000. According to Richards Barry Joyce & Partners, the Interstate 495 West office market currently has a vacancy rate of 20.7 percent, while the availability rate is a staggering 30.03 percent. Developers have been pushing competitive deals in several local office parks, including the former Lucent Technologies facility at 55 Fairbanks Blvd., and at the 3Com corporate park acquired late last year by Berwind Property Group.
Of particular curiosity to observers was the apparent dismissal of a brand-new building on Donald J. Lynch Boulevard owned by a partnership between Nordic Propeties and the Bristol Group of San Francisco. “I am amazed that they wouldn’t have gone there,” said one broker of DFCU. Another source familiar with the DFCU proposal maintained that the Nordic/Bristol ownership was unwilling to stray enough from its originally projected rents to do a deal with the tenant, instead preferring to wait out the current malaise in the market.
“Their [national] portfolio is doing well, and they see no reason to panic [on Marlborough] just yet,” said the source of the Bristol Group, which reportedly has a controlling interest in the building. Nordic Properties and Bristol officials did not respond to inquiries regarding the situation.
The DFCU project is just the latest in a series of positive steps in the past few months for the MetroWest area, such as Lincoln Property Group having inked Exact Sciences to a sizeable lease at 3Com park on behalf of Berwind. Meanwhile, Wellington Funds has also reportedly committed to space at 3Com and Bose Corp. is said to have finally placed a former Compaq Computer site in Stow under agreement after months of discussions with the ownership, Hewlett-Packard Corp. According to sources, the Stow deal is contingent upon getting expansion approvals for the property from the community, even though the structure already features some 300,000 square feet.
While Bose works its way through those discussions, the DFCU plan does appear to be moving ahead. Given DFCU’s current silence, the fate of the organization’s existing headquarters is uncertain, although one source maintained that the DePietri project represents an expansion.
Founded in 1979, DFCU managed to survive the demise of Digital Equipment Corp. by relying on loyal customers who either formed new companies or went to other firms and convinced their employers to offer the credit union’s services. DFCU ultimately purchased the former headquarters of the Rockport Shoe Co. when it left Marlborough in 2001. DFCU paid $12 million for 220 Donald J. Lynch Blvd., which features just under 85,000 square feet of space.
As for DePietri, the renovation of DEC’s headquarters proved to be an early success, with a heavy concentration on dot-com and technology-related companies. Among the biggest coups for the one-time mill was the addition of Monster.com to the tenant roster. Located in downtown Maynard, the property that came to be known as Clocktower Place features more than 1 million square feet of space.
